Tax Tip 2022-128
\nAugust 22, 2022<\/p>\n
New entrepreneurs can start out on the right foot by making sure they understand the tax responsibilities of running a business. The process can seem daunting, but IRS.gov has resources to help new business owners<\/a>.<\/p>\n <\/p>\n Here are a few things new entrepreneurs need to do when starting their business.<\/p>\n \u00a0<\/strong><\/p>\n Choose a business structure<\/strong><\/p>\n The\u00a0form of business<\/a>\u00a0determines which income tax return a business taxpayer needs to file. The most common business structures are:<\/p>\n \u00a0<\/strong><\/p>\n Choose a tax year<\/strong><\/p>\n A\u00a0tax year<\/a>\u00a0is an annual accounting period for keeping records and reporting income and expenses. A new business owner must choose either:<\/p>\n \u00a0<\/strong><\/p>\n Apply for an employer identification number<\/strong><\/p>\n An\u00a0EIN<\/a>\u00a0is also called a federal tax identification number. It’s used to identify a business. Most businesses need one of these numbers. It’s important for a business with an EIN to keep the business mailing address, location and responsible party up to date. IRS regulations require EIN holders to report changes in the responsible party within 60 days. They do this by completing\u00a0Form 8822-B, Change of Address or Responsible Party<\/a>\u00a0and mailing it to the address on the form.<\/p>\n \u00a0<\/strong><\/p>\n Have all employees complete these forms<\/strong><\/p>\n \u00a0<\/strong><\/p>\n Pay business taxes<\/strong><\/p>\n The form of business determines what\u00a0taxes must be paid<\/a>\u00a0and how to pay them.<\/p>\n\n
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